Effects of overvaluation and exchange rate volatility over industrial investment
By: OREIRO, José Luís
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Contributor(s): BASILIO, Flavio A. C | SOUZA, Gustavo J. G.
Material type: 
ArticlePublisher: São Paulo : Editora 34, July./Sept. 2014Online resources: Acesso Revista de Economia Política = Brazilian Journal of Political Economy 34, 3, p. 347-369Abstract: The present article aims to analyze the recent behavior of real exchange rate in Brazil and its Abstract: effects over investment per worker in Brazilian manufacturing and extractive industry. Preliminary Abstract: estimates presented in the article shows an over-valuation of 48% of real exchange rate in Brazil. The Abstract: reaction between the level (and volatility) of real exchange rate and investment (per worker) in Brazil Abstract: is analyzed by means of a panel data econometric model for 30 sectors of Brazilian manufacturing Abstract: and extractive industry. The empirical results show that the level and volatility of real exchange rate Abstract: has a strong effect over investment per worker in Brazilian industry. Finally, we conclude the article Abstract: presenting a proposal for a new macroeconomic regime that aims to produce an acceleration of Abstract: economic growth of Brazilian economy and, by that, a catching-up process with developed countries
The present article aims to analyze the recent behavior of real exchange rate in Brazil and its
effects over investment per worker in Brazilian manufacturing and extractive industry. Preliminary
estimates presented in the article shows an over-valuation of 48% of real exchange rate in Brazil. The
reaction between the level (and volatility) of real exchange rate and investment (per worker) in Brazil
is analyzed by means of a panel data econometric model for 30 sectors of Brazilian manufacturing
and extractive industry. The empirical results show that the level and volatility of real exchange rate
has a strong effect over investment per worker in Brazilian industry. Finally, we conclude the article
presenting a proposal for a new macroeconomic regime that aims to produce an acceleration of
economic growth of Brazilian economy and, by that, a catching-up process with developed countries
v. 34, n. 3 (136)
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